JUNEAU — The state House passed a rewrite of oil taxes that advocates say will trade short-term state income for more jobs and long-run development.
The measure, however, won’t clear the chamber until a review today.
Representatives from the Interior split down party lines in Thursday evening’s vote, with Republicans for and Democrats against.
The measure would cut rates, expand tax breaks for explorers and take other steps to encourage oil development on and around the North Slope.
House members passed the bill 22-16 and will review the vote under reconsideration rules today. They also split largely along caucus lines, with minority Democrats opposing a plan backed strongly by House Republicans.
But even some who voted for it said they would have preferred a more thorough analysis.
“I’m going to support the bill but not with total confidence,” said Rep. Alan Dick, R-Stony River, before the evening vote. He said “you can’t make good decisions without good facts. And we don’t have good facts.”
A handful of Democrats within the majority caucus unsuccessfully proposed a compromise — their rewrite would include slightly higher tax rates than those sought by Republicans.
Rep. Bryce Edgmon, D-Dillingham, said he and colleagues behind the failed amendment had looked to ease high taxes while “making sure that our treasury doesn’t get short-shrifted along the way.”
The group’s amendment failed 24-14, but at least one Republican said he’d consider supporting a similar tweak as the measure heads toward a skeptic-laden Senate.
The bill, House Bill 110, is the top priority of Gov. Sean Parnell.
Interior votes
Among Interior representatives, critics were louder Thursday than proponents.
Supporters said the rewrite is needed to encourage more oil production, but Rep. David Guttenberg, D-Fairbanks, said little ensures it would work.
He said he’d favor targeted increases to incentives for firms that, for example, build more production facilities.
But he said lawmakers have not reviewed the rewrite, or heard enough about how it might affect development, to make an informed decision.
“We have an obligation to our people; it is written in the Constitution,” Guttenberg said. “And we need more information, we need a better understanding of what is in the ground, how the rocks work.
“To me, this bill is like raising our children’s allowance for not doing their chores.”
Rep. Scott Kawasaki, D-Fairbanks, said the bill represents an inappropriate leap of faith that the oil industry will respond to a tax reduction.
He said history suggests the industry is a fickle dance partner.
“I think it’s going to leave us, again, broken-hearted,” he said.
Rep. Bob Miller, D-Fairbanks, said the only certainty in the bill is that oil companies would retain billions of dollars that otherwise reach state coffers.
But Rep. Steve Thompson, R-Fairbanks, backed the tax cuts and said the state would maximize its benefit from industry investment by boosting job figures and sustaining oil production, not merely by harvesting value for public coffers.
“House Bill 110 isn’t perfect,” Thompson said. “But it is a start in improving the investment atmosphere in the state of Alaska.”
Rep. Tammie Wilson, R-North Pole, said the need to protect jobs overrode concerns about the bill.
She said enough information has arrived to cast an informed vote.
“We cannot afford to do nothing,” she said.
Republican Reps. Dick, Thompson, Wilson and Eric Feige of Chickaloon voted for the bill. Guttenberg, Kawasaki and Miller voted against it.
Contact staff writer Christopher Eshleman at 459-7582.
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